Friday, July 26, 2013

Diary of a Failed Customer Service Experience


Preface: This is a true story. All the emails below are real. Even though it is humorous, it makes two serious points: what not to do when you sell a broken product, and, perhaps more importantly, that sometimes great companies have broken processes. When we are out benchmarking, we do not want to hold up any single company as one to emulate. We want to hold up specific processes. Apple makes great products, but that’s not enough. In this market you need to couple great products with great support. Or you die. So, do not benchmark Apple’s customer support capabilities – at least in this case – unless you want a worst-in-class reminder of what not to do.

When my sister-in-law, Sandy, celebrated her birthday recently, my family and I decided to surprise her with a special gift, the brand new Macbook Air. We ordered it through the Apple Store, wrapped it, and gave it to her. She opened it up and it was what Apple calls, “DOA”.

A customer pays over $1,000 for a product purchased directly from you that does not work right from the start. What would you do? That’s easy: give them a new one with no bureaucratic hassle. Relieve the pain by making the process polite and simple. We just completed the second annual Call Center Benchmarking Focus Day and I can assure you that the auto companies get this. GM may be best-in-class here.

I was on a telephonic meeting with the board of directors when I received Sandy’s first email apologizing for troubling me – but the machine had crashed repeatedly and finally wouldn’t turn on at all. She had already contacted Apple, and then emailed me after receiving the following email from their technical support representative. All emails are in ascending chronological order.

 Dear Sandy

Thank you for contacting Apple.

This is a follow-up to our conversation earlier today; with your case number (471198415) and my contact information (see below).

You can contact me in regards to this case by replying to this email, or phoning using the number below.

Sincerely
C__ P__
Apple

P.S. If you need to contact me about your case, call me at 1-877-388-0879 extension #####. I am scheduled in the office today (Tuesday) 9:30 am - 6:00 pm ET, Wednesday July 24th 1:00 pm - 6:00 pm ET and Thursday July 25th 9:30 am - 6:00 pm ET. I will then be away from the office until Monday August 5th. If you reach my voicemail, please leave your name, phone number, case number, and the best time to reach you.

 … At this point I took over …

C__,

I bought the laptop for my sister-in-law for her birthday, and it does not work. You guys really took the thrill out of the gift and the occasion – really let me down. Attached is the invoice of the computer. Tell me what complex set of inconvenient things I need to do to get her a new computer to replace the one that never worked.

Best Regards,

David

Dear David and Sandy

I am very sorry that you did have to experience this with your brand new computer. We at Apple do stand by our products and want to do right by you.

Since speaking with Sandy, I have been doing further research into the issue you are experiencing. There are two ways we can resolve this for you:

1) I can set up an exchange / replacement for you via phone and Fedex. This will take an estimated 5 - 7 business days; but this way allows our engineers to take a look at the old computer and discover what the issue is to prevent it in future computers.

2) With the receipt / order number, this can be returned via our online sales support team (Either I can facilitate this, or they can be reached directly via 800-676-2775) This way allows a credit to be placed on your credit card; and you can decide to either repurchase through store or online.

Please let me know in what way I can assist with this, and if you wish me to contact via phone instead of email.

Sincerely

C__ P__
Apple

C__,

I choose the red (above). Please send me prepaid Fed-Ex label.

Dear David

I will need to call you to go over the process, verify your information and read a release statement. What would be a good time to call, and what number should I use? (my hours are below)

Sincerely

C__ P__
Apple

 … After trying repeatedly to reach this service representative directly, I gave up and called Apple’s support team…

C__,

I am speaking to Apple support right now and there is no case number, nor are there any notes associated with the original order number. I have tried to call you repeatedly and nobody answers. I suspect that you are at a call center in some country far far away and cannot really do anything to help customers.

Bye,
David

Dear David

Just to clarify; you are calling in to our online sales support team for a return / refund? Please let me know so I can close the case, or call you to continue the exchange.

Sincerely

C__ P___
Apple

C___,

The person I am on hold with right now does not think you exist, that there is no "case", and there are no notes taken by you. You, my dear, do not exist.

Dear David

Your case number is in the subject line - there are numerous notes in this case. As for my not being able to answer my line, it is going to voicemail because I am currently on another call. If you give me an approximate time, and a number to reach you, I would still be happy to facilitate the exchange. 

Sincerely

C__ P__
Apple

C___,

I think I should sell my Apple stock. The Apple support person I just talked to who gave me a pre-printed label to send the Mac-Air back (1) could not find you in her database, (2) brought in technical support to confirm that the case number you provided was bogus, and (3) confirmed that there were no notes associated with the original order number. She apologized that I would have to pay to send what you guys call a "DOA" machine back to you. She is giving me a free plastic case for the Mac Air to make me feel better – I will burn this case in effigy to memorialize this rock bottom horrible customer experience. I will, furthermore, use this as a vivid example to train my clients in how not to treat their customers who buy stuff that is, similarly, "DOA."

Best Regards,

David

Dear David

I must apologize that you feel you received poor customer service. I assure you that not only I, but your case number do exist. Your case number (471198415) is tied to the serial number of the MacBook Air within our system. Any technical advisor can pull up the case number and see the notes saved there. Also, I did speak with our sales support team. While they can pull up the order information and the exchange they are setting up, our Sales Support team does not use the same tools / programs as we do in technical support; so they would be unable to cross-reference case numbers and order numbers. This may be where the confusion comes from. One last thing I would like to clarify: There would have been no charge for the exchange I would have facilitated. Your brand new computer did not work at all, and this is not acceptable. We would have exchanged it at no charge with a completely equivalent computer. Once again, I am sorry that your experience with us was so unsatisfactory.

Sincerely

C__ P__
Apple

C___,

I understand your need to make excuses for Apple's mediocrity in customer service. I work with the auto industry and (many auto OEMs) had the same issues that you all are dealing with. It is not my fault, nor do I care why, that your support network is not well connected and does not share the same "tools." Apple changed the world with the iPhone, but, it did not change itself enough. I work in a shielded office where cell phones do not work, and I am on the phone 100% of the time. Therefore, I can't just wait for you to call ... because I am fairly unreachable. . Bottom line, the way you treat customers sells a lot of Windows/Google based products. Bill Gates thanks you from the bottom of his ... well, er, ah ... pocketbook.

David Carlisle

C__,

I thought I had plumbed the depths of Apple's incompetence in dealing with customers who receive "DOA" computers. But, I had not. Shortly after I sent this last email I received two more emails from Apple (PDFs of which are attached). The first one informed me that the "free case" for my broken Macbook Air was on the way. Yippee! The second one said that Apple was "having difficulty obtaining payment authorization" for my new free case to cover my broken Macbook Air. Yes, the old AMEX number no longer worked because of online fraud, and I had already updated my Apple account with the new card number. Thank the Lord that your computers systems do not talk with each other, otherwise, I'd have been charged for my free gift from you-all.

Best Regards,

David

Endnote: After all this, without any explanation, I received a computer-generated delivery notice that Apple was sending me a replacement MacBook Air sometime in the next week. Afterwards, I went to the post office and paid $3 and some change for a box to mail the DOA machine back to them. Hmmm maybe "C" really does exist?

Sunday, July 21, 2013

Parts Trader

If you're involved with the collision repair industry, you've no doubt heard the hullaballoo regarding State Farm and Parts Trader. For those who haven’t, here's a brief summary:

State Farm recently launched Parts Trader, a mandatory online parts ordering platform for their Select Service (Direct Repair Program (DRP)) shops. These Select Service shops receive State Farm's collision customers in return for ceding some control to the insurer. The parts ordering platform is meant to capitalize on all the efficiencies of e-commerce, reducing the cost of parts by requiring suppliers to submit competitive bids. Parts Trader is undergoing a gradual rollout throughout the United States.

It's clear that State Farm isn't just interested in an efficient online ordering platform. Otherwise, they could just mandate that their Select Service shops use any online platform for parts ordering, and do this at no cost to themselves. Instead, they've spent millions of dollars on a brand-new online ordering platform. Why?

The collision parts market in the United States is about $16 billion. At present, insurance carriers pay about $10 billion dollars of that total, but have little influence over the parts procurement process or pricing. State Farm’s competitive online parts marketplace provides leverage by pitting suppliers against each other to offer the best price on parts. Even a one percent reduction in parts cost represents a $100 million savings for insurance companies.

There are two significant negative impacts for OEMs.
  1. Loss of market share: A wider reach throughout salvage yards and aftermarket suppliers in the United States for parts sourcing will eventually mean that more alternative parts are used. This impacts OEM profitability and customer repair quality.
  2. Financial harm to dealers: A competitive marketplace means that dealers will have to offer even greater discounts. Parts suppliers, including dealers, will also be required to pay a fee to participate in Parts Trader.
Unfortunately, even if OEMs and IRFs band together and manage to kill State Farm’s Parts Trader, Nationwide or GEICO will almost certainly come out with a similar program. The business case is far too compelling and the stakes far too high for insurance carriers to leave parts cost in the hands of the parts supplier, the shop and the claims adjuster. Eventually, this concept is going to be implemented in such a way that it takes off. It may not be this go-around with Parts Trader, but the competitive online parts marketplace will happen. The industry is consolidating, and there's even more incentive for large multi-store operators to follow the insurance companies' policies in return for repairs. After all, keeping the doors open at a big shop requires a healthy volume, and the easiest way to a healthy volume is through DRP.

If the concept is here to stay, what strategies should OEMs explore?
  1. Adopt, use and manage smarter pricing. Right now, OEMs have access to tremendous quantities of data through estimating platforms and CollisionLink. OEMs also have relatively sophisticated pricing systems and access to robust analytical platforms. Together, pricing systems and data enable surgical precision on parts pricing far in advance of what aftermarket parts providers can manage. Separate out collision parts pricing from the rest of your pricing rules and strategies, and get down into the details. This means creating strategies for pricing specific part numbers and car models. Although OEMs do pursue pricing strategies and aging curves, this is usually done at a broad, part-type level. In other words, your strategy for pricing a bumper for a full-size pickup truck should not necessarily be the same as your pricing strategy for a bumper for a midsize sedan. And the key to the success of pricing strategies is dynamic management of strategies, rather than “set, forget and revisit in 5-10 years.”
  2. Promote price competitive programs and alternative online ordering tools. Insurers may have leverage over behavior for their DRP shops, but OEMs have first-mover advantage here. CollisionLink has been in the market for nearly a decade, and combines online ordering with OEM price-competitive capabilities. In contrast, Parts Trader is only in a few markets, but more are sure to follow, and other insurance carriers will jump in the game shortly. An aggressive push by the OEMs to get their tools embedded in the market at the dealer and shop level before the insurance carriers enter will make the road harder for insurance companies and promote OEM market share. Your price competitive programs have to be integrated into your smart pricing strategy, or you’ll be working at cross-purposes.
  3. Expansion of advanced technical training. Factors such as CAFE, safety regulations, and the natural order of progress—that is, advanced materials and design—have made parts more complex, and more expensive. That complexity works to OEMs’ advantage. 95% of body shops in the United States can't competently complete repairs on structural aluminum. 99.9% of body shops in the United States can't competently complete repairs on structural carbon fiber or CFRP. If OEMs can control the training associated with advanced materials, they can make sure that vehicles get repaired at shops which use more OEM parts.
  4. Core returns and salvage leakage. How does a part wind up in an LKQ yard? If OEMs can control the spread of cores and salvageable parts using core return charges and total-loss buyback programs, they can starve the network of salvage parts. Of course, this comes at a cost, but salvage parts are the fastest-growing segment and the most risky for OEMs. After all, it is easy to argue that an aftermarket-produced part does not meet or exceed OEM standards. It is more challenging when that part came from the OEM at some point. Many OEMs are already active in this area – but they need to dial up the breadth of parts covered and the aggressiveness of the programs.
  5. Certified Body Shops. A certified shop network provides the OEM with additional input into the repair process and helps take some of the leverage away from insurance carriers. When combined with advanced training and access to OEM tools, equipment and techniques, certified body shops are in a position to capture more of the high end of the increasingly complex repair market. OEMs may lose the battle on covers and similar nonstructural parts, but there are opportunities to make up ground in structural, safety, and specialized parts.
The bottom line: Expect insurance companies to increase their involvement in the parts procurement process, and expect it to have a significant negative impact on OEM market share. Just maintaining current market share will require a tremendous amount of additional effort.

Friday, July 12, 2013

Aftersales 2.0 – How Should Dealerships Effectively Manage Social Media?

Vision: A customer arrives at your dealership (or one of your brand’s dealers) and says “I need service and remember seeing your dealership on Facebook, so when I drove by I decided to drop in. Can you help me fix my vehicle?”,

Reality: A customer drives by your dealership (or one of your brand’s dealers) because he or she isn’t in the target demographic for your “traditional” advertising. Your mail, TV, and radio ads aren’t reaching this person.

How can we get from the reality to the vision? Dealers can use social media to promote their stores, and OEMs can support dealers’ use of social media. Right now, your customers are out there researching, reading, writing and/or sharing articles, reviews, comments, and opinions on your dealership. They are deciding where to service their car, and chatting about their latest visit – the good and the bad.

A 2012 study conducted by Dealer.com found that, “69 percent [of those who use Facebook in the automotive purchase process] indicated that a friend’s favorable post about a dealership positively impacts their opinion of the dealership.” Dealers may have social media accounts, but most dealer social media efforts could use improvement. OEMs bear some responsibility here, as well. Dealers need to engage effectively, and OEMs need to support dealers in their drive for better engagement.

Dealers: Engage by Creating Original Content

Dealers should be engaging with customers by creating two-way conversations through posts, tweets, and blogs. Only then can dealers begin to establish real relationships with customers. By taking the time to communicate with existing customers, in both positive and negative situations, dealers show their friends and followers the quality of service that can be expected from them. Also, achieving communication and participation from followers will trigger social media filtering algorithms to push your content to their front page, as well as the front pages of others in their networks.

Dealers should focus on developing creative, high quality content that goes beyond traditional marketing materials. Dealers could post photos of service employees with a “fun fact” about them, so when customers come in they may recognize these employees and feel they have a relationship. It may seem like photos of employees or corporate outings have nothing to do with cars – and that’s true. However, putting a human face on the business will help dealers engage.

Dealers should take the time to look at who’s watching their social media accounts. Followers probably live within 50 miles of the dealership, but how many of them have been to the service center recently? Use social media pages to bring these customers in by posting new customer discounts and service coupons that are exclusive to social media. Ask customers to share what they love about their car, or photos of where they have gone in it. Reach out to customers or potential customers, even if they don’t need anything. If they’re used to talking with dealers, customers won’t have to think before selecting a dealer when they ultimately need help.

OEMs: Push Your Dealers to Use Social Media by Offering Tools and Opportunities

OEMs may find it necessary to encourage some dealers to adopt social media. There are countless vendors in the marketplace that make engagement faster and easier. Even if it’s not feasible to purchase these solutions on a large scale in order to make them available to dealers, there are other less expensive options available. Partnerships with vendors to offer discounts to dealers, or subscriptions to social media training classes may help dealers pick up social media at a faster pace. Encouraging dealers to adopt social media raises service retention and ultimately drives purchases and purchase loyalty.

Bottom Line: Dealership customers care about social media. Dealers should too, and OEMs can’t sit back and wait for this to occur on its own. Dealers should focus on engagement immediately, and OEMs need to provide tools and resources in order to ensure that this engagement happens effectively and frequently.

Wednesday, July 3, 2013

Cars Still Don’t Fly, But They’re Learning to Talk

In recent years we’ve learned all about the new generation of digital customers, the kind who forget about a dealer as soon as they find the four-star garage down the street with “discounted parts and labor.” For these customers, when their check engine light comes on, they do a Google search for a garage and you’ve lost them forever. It happens that quickly. OEMs need to capture customers before they have the chance to consider shopping online for a service provider. That means providing a digital service upfront that rivals the knowledge of Siri at the speed of blazing fast 4G LTE networks.

Fortunately for OEMs, the new wave of in-vehicle technologies provides hope. Telematics is the technology of sending, receiving, and storing vehicle information via telecommunication systems. OEMs and individual dealers can harness telematics systems to access vehicle information, including location and diagnostic data. The best part is the four-star-rated garage down the street is left sitting on the outside looking in. Telematics opens enormous opportunities for dealers to gain an edge in retaining service customers.

People have faith in the capability and honesty of consumer technologies. No one checks with their IT guy to see if that “required Windows system update” is in fact necessary, even if the update might render their computer useless for an hour. Why, then, wouldn’t customers trust their vehicles if they were told that it was due for regular service, or that there is a failing airflow sensor? People have been trained to trust what their vehicles tell them since the invention of the fuel gauge.

Telematics goes beyond self-diagnostics. In a recent Carlisle benchmark of several auto and heavy equipment OEMs we looked closely at how telematics is evolving as a new vehicle technology. The most advanced systems are capable of facilitating appointment scheduling, but the industry hasn’t fully adopted the process yet. The vision of the “Connected Car” seamlessly brings in and retains service customers, starting with the transfer of vehicle usage and diagnostic information via telematics. This is what the new generation of appointment scheduling could look like for drivers:
  • My vehicle alerts me that it is due for service or repair
  • Using my current location and accessing my cloud calendar, my vehicle proposes several times for me to visit my local dealer
  • The dealer confirms the appointment and orders necessary parts
  • I arrive at the dealer for my appointment and my service is completed in record time, thanks to the off-the-shelf availability of all required parts
  • I don’t waste any time researching IRFs

BOTTOM LINE: Telematics presents exciting opportunities for OEMs because it allows OEMs to capture the customers before they have the chance to search for an IRF. Dealers will benefit from effortless appointment scheduling and remote transfer of vehicle self-diagnostic information, but that’s just the beginning. Telematics will one day boost retail parts inventory management performance to unprecedented levels with anticipative stocking. Further, the added benefit of capturing real-time driver behavior regarding service decisions could prove invaluable to OEMs’ understanding of parts and service market share and position.